What were the salient agreements and actions of the latest German-South African Binational Commission (BNC)?

The Ninth Session of the Germany-South Africa Binational Commission (BNC), co-chaired by  Dr. Frank-Walter Steinmeier, Foreign Minister of Germany,and Maite Nkoana-Mashabane, Minister of International Relations and Cooperation (DIRCO) of South Africa, took place in Berlin on 16 November 2016. The BNC is the principal platform to steer the intra-governmental relations between Germany and South Africa. It meets every other year with the participation of several Ministries from both governments in order to establish an agenda and programme for joint action, in most instances carried out by committees or working groups.

The salient agreements and actions from a private sector perspective (please find the full text here):

Trade and investment: South Africa remained Germany’s most important trading partner on the African continent in 2015 with total trade 15.5 billion Euro. All parties agreed to make joint efforts to boost South Africa’s exports to Germany with a particular focus on high value-added products. Market access is the most important prerequisite for mutually beneficial, free and rules-based trade. Besides the lowering of customs duties, minimising of non-tariff barriers is of increasing importance for trade growth. South Africa is the most important destination for German direct investment in Sub-Saharan Africa. The stock of German direct investment in South Africa has been increased from 4 bn Euro in 2008 to nearly 6 bn Euro in 2014. On 15 November, a new Enterprise and Supplier Development Fund has been ratified, which will help German business to meet the requirements of public procurement and local content. Both sides agreed that a high level of legal protection of investments by their respective national laws as well as consistent and fair business practices are important in order to boost foreign direct investments. 

Renewable Energy: Various aspects related to energy generation from renewable energy sources were discussed, including the German-South African Energy Partnership and an invitation to participate in the annual Berlin Energy Transition Dialogue (BETD) in March 2017, organised by the German Federal Foreign Office and the Federal Ministry for Economic Affairs and Energy. Germany committed an interest-subsidised loan of up to EUR 100 million for the integration of renewable energy to the national electricity grid.

Raw materials and beneficiation: Germany indicated its interest to strengthen its cooperation with South Africa in the field of raw materials along the entire value chain, in full alignment with South Africa’s beneficiation strategy, and suggested to leverage the German Chamber’s Competence Centres on Mining and Mineral Resources in South Africa in that regard.

Skills development and vocation training: The German Chamber, in cooperation with German companies, offers the Builders Training Centre and the Commercial Advancement Training Scheme in Africa. In addition,  South Africa and Germany agreed to reinforce their cooperation Technical and Vocational Education and Training (TVET), which means that Germany will assist South Africa in rolling out the training of electricians and plumbers to improve the capabilities of TVET colleges under the Dual System Pilot Project and improving the quality of training by expanding in-service training for college lecturers.  Please note that context that e.g. Austria has recently committed itself to a similar vocational programme in South Africa 

Cooperation in the Financial Sector: The intent to cooperate is outlined in the Memorandum of Understanding between the South-African Reserve Bank and the Deutsche Bundesbank. Joint research projects on financial sector topics will be done for the purpose of capacity building and supporting formulating of policy in both countries.

Double Taxation Agreement (DTA): Both countries declared their strong interest in concluding the negotiations on the Double Taxation Agreement and strive to solve all open questions as soon as possible. 

Technical and Financial Development Cooperation: The total volume of bilateral Technical and Financial Cooperation since cooperation began in 1992 amounts to EUR 1.1 billion. Germany undertakes to provide South Africa with a new amount of up to EUR 314.25 million for bilateral Technical and Financial Cooperation (EUR 285.75 million for Financial Cooperation programmes and EUR 28.5 million for Technical Cooperation programmes). All projects are recorded as being fully aligned with the South African National Development Plan and shall be continued in the context of the implementation of the 2030 Agenda for Sustainable Development including the Sustainable Development Goals. 

New funds were committed to the following programmes:

  • Green Economy
  • Renewable Grid Integration and Strengthening Programme EUR 100 million
  • South African Facility for Green Growth (SAFGG) EUR 75 million
  • Climate Initiative for Urban Waste Water Treatment in Cape Town EUR 80 million
  • International Housing Solutions Fund EUR 7.5 million
  • South African – German Energy Programme (SAGEN) EUR 9.5 million
  •  Technical and Vocational Education and Training (TVET) and Skills Development
  • Promotion of Vocational Education and Training EUR 8.25 million
  • Skills Development for a Green Economy EUR 9 million
  • Governance and Public Administration
  • Governance Support Programme (GSP II) EUR 5 million
  • HIV Prevention
  • Multisectoral HIV Prevention in Eastern Cape EUR 8 million
  • Support of the Activate! Leadership Programme for Youth Development EUR 7 million
  • HIV/AIDS Prevention EUR 5 million